General Motors launched its Maven car sharing service today in Toronto. But is the new service giving in to a move from car ownership to car borrowing, a new way to put potential customers behind the wheel of GM cars and trucks to boost sales, or a way to combine both and make a new revenue stream at the same time?
Maven, GM's car-sharing app, gives users access to the vehicle they need, when they need it, argues the company. The service started with a pilot program in Ann Arbor Michigan before expanding to other cities.
The service is aimed at services like Car2Go, Enterprise CarShare and Zipcar, but with a twist. It offers a wider selection of classes of vehicles, and it does it for a lower price. Subscribers book a car using the app, so there's no chance of two people showing up for the same car at the same time.
Toronto Maven users will get to choose from 40 vehicles at the start of service. That includes small cars like the Chevrolet Cruze, and Trax crossover, but larger vehicles like the Malibu or Tahoe, or more premium cars and trucks like the GMC Acadia or Cadillac ATS and XT5. Even Chevrolet's plug-in electric Volt is available.
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Cars will start from $9 per hour, which includes gas and insurance. Maven cars will be available in parking locations around the city including Bloor West Village, The Entertainment District, and Ryerson University.
"Bringing Maven car sharing to Toronto not only reduces congestion, but also represents the latest step in the development of General Motors’ mobility footprint in Canada," said Steve Carlisle, president and managing director, GM Canada.
With transit systems continuing to suffer from underfunding and decreased ridership, owning a car remains important for Canadians. Even for those in major cities. For many, the opportunity to have an on-demand car is a better choice than ownership. That's why for every car share vehicle on the road, about 10 private cars are taken off the road. Expanding Maven now puts GM ahead of most manufacturers in the race to sell mobility, not vehicles. Only Mercedes is ahead in Canada, with its Car2Go service operating in six cities nationwide.
The service is also a good way to get people who might not have otherwise considered GM vehicles to try them out. Maven has no sign-up or membership fees, so is a very low-commitment way to try a vehicle without having to go to a dealership. The cars used by the service will have GM's latest infotainment systems and connected technology, so they are an effective way to put urban-dwelling butts in cars.
Selling mobility instead of cars can still end up being a profit centre for GM. Rates starting from $9 seem low, especially when gas is included, but it can add up. A $9 car that is shared for just three hours per day means $810 in revenue for GM. Compare that with the $524 per month generated by a Cruze LT on a 24-month lease. Boost that to five hours per day and the car is now generating $1,350 per month.
Maven says that with its service, "car ownership in Toronto is no longer necessary." But that doesn't mean that GM doesn't still want you to buy cars. They just happen to also like it when you share one of theirs. Maven's car sharing service starts operations in Toronto today.